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BONDS (PRIORITY (Charged covenants (CC) have priority over bond if…
BONDS
PRIORITY
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Same day buying/selling: B ensures bonds cancelled against property being sold so P takes unencumbered title. Don't register any new bond B taking until next day otherwise attaches to new & old property. On sale vendor obtained assurance from lender bond cancelled or appearance in Cct by lender giving oral consent to release of the property from the charge created by the bond (bond remains but no longer attached to property)
Other lenders: usually agree to give each other priority where general bond and subsequent specific bonds against later properties to that lender
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Charged covenants (CC) have priority over bond if registered before or on the date of bond registration
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DRAFTING
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(2) Parties (inc jointly & severally and their respective heirs, admins & exectutors)
(9) Attestation clause (in witness of ... appeared before the Ct ... ratified this bond.... on all real and personal pty present and future/specified pty)
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Guarantees would be inc in attestation cls. most imp clauses - (1) Gtee repayment of monies due to bank by B (2) statement that Gtor considered principal debtor (3) Gtor waives rights at law inc (a) droit de discussion the Gtors right to resist a call to pay amount G'teed until L exhausted remedies agst B and (b) droit de division (where more than 1 Gtor only claim to each of them for their portion)
PROCEDURE
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(6) If new bond subsequent to existing bond write to pre-exisiting lender for the to come to Cct on completion day
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(7)Bond is stamped at Greffe after Cct - DocD: 0.5% of amount secured & court fees depend on length of bond and no. of parties to it
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CREATION & REGISTRATION
Written (does not need to be signed by both parties), confirmed before Cct (only B/his Adv or L Adv required - if L not attend Cct ask BAdv confirmation afterwards bond entered into)
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If accidentally reg before old property registered is conveyed need agt from bank to release (if in doubt leave bond out as more diff to rectify is wrongly reg)
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BOND (not loan) registered in Livre des Hypotheques, Actes de Cour et Obligations against name of B
Attaches to ALL real property of borrower (unless otherwise stated) on or before the date of bond registration (Alderney bonds not general but specify the property)
SAISIE
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Leases: if take bond after grant of lease, took subject to the lease (diff for eviction). Tenants should register their lease (process)
Prescription
On demand: 6 years starts immediately from advance of £ (in practice each repayment confirmation of the contract)
Majority of bonds % payable - each payment of % interrupts prescription by A3 Loi Relative aux Prescriptions 1889
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